Chris O'Shea
Buying a house can be extremely expensive. Mortgage rates are down, but they’re still relatively high compared to rates of the past few years. And the cost of homes seems to only get higher. Oh, and then there’s the down payment. If you don’t have a big down payment already saved, you might feel helpless. However, don’t despair. You do have some options. Let’s take a look.
What to Know About Down Payments
A down payment is the initial lump sum payment that you pay when buying a home. It’s usually about 20 percent of the purchase price. As home prices rise, down payments also increase.
Down Payment Assistance
Most states and local governments offer help on down payments (also known as “down payment assistance”) to help home buyers. Here are the various types of down payment assistance:
- Zero-interest, forgivable loan. The loans are forgiven after a certain amount of time, usually about five years.
- Grants. Cash given out that doesn’t have to be paid back.
- Low-interest loans. This loan has a low interest rate and spreads out the down payment and closing costs over a few years.
Qualifications for Assistance
These programs are typically only available to first-time home buyers. The best place to find them is through your local government or housing authority. Some federal programs can be found via the Department of Housing. Once you apply for the down payment assistance, you’ll likely be paired with a housing agent who has experience in securing houses using the program you are using.
Do One Thing: Check with your local government for help with down payments.
